Documents & Reports

Mitigating the economic impact of an aging population : options for Bulgaria (English)

Abstract

Bulgaria is undergoing a profound socio-economic transformation brought about by extraordinary demographic change. Bulgaria is heading for the steepest drop in the working-aging population of any country, and it will impose a heavy burden on the economy... See More +Bulgaria is undergoing a profound socio-economic transformation brought about by extraordinary demographic change. Bulgaria is heading for the steepest drop in the working-aging population of any country, and it will impose a heavy burden on the economy. The higher the productivity growth, the easier it will be for Bulgaria to manage this demographic challenge. There may be some potential to mitigate the impact of the declining working-age population by expanding the work force. As Bulgaria ages, its work force will become radically different. Going forward, Bulgaria's productivity growth would need to accelerate to sustain aggregate output growth. The high incidence of old-age poverty in Bulgaria and the currently rapid aging of its population raise the question how an acceptable standard of living for its elderly can be funded. Aging will affect the demand for key public services. Population aging will place unprecedented demands on the provision of health care. Demand for long-term care (LTC) services is bound to increase strongly with aging. Bulgaria's pension system is projected to remain in deficit throughout the projection horizon. The current pension system also raises equity concerns. Simulations suggest that even under optimistic assumptions, Bulgaria's demographic transformation will exert steady fiscal pressures and depress economic growth. Scenario analyses show that the government can play a significant role in mitigating these effects.
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Citation

Related Links

World Bank. 2013. Mitigating the economic impact of an aging population : options for Bulgaria. Washington, DC : World Bank. http://documents.worldbank.org/curated/en/795781468235152407/Mitigating-the-economic-impact-of-an-aging-population-options-for-Bulgaria